Property, Plant and Equipment, Intangible Assets and Goodwill

3 Months Ended

Mar. 31, 2015

Property, Plant and Equipment, Intangible Assets and Goodwill

NOTE 2 – Property, plant and equipment, INTANGIBLE ASSETS AND GOODWILL

Dispositions

During the first quarter 2015, the Company sold its executive office building and data and administrative service center located in San Antonio, TX in exchange for proceeds of $34.3 million. Concurrently with the sale of these properties, the Company entered into lease agreements for the continued use of the buildings, pursuant to which the Company will have annual lease payments of $2.6 million. The Company recognized a loss of $0.2 million on the sale of the executive office building, which was recognized on the date of sale and a gain of $8.1 million on the sale of the data and administrative service center, which will be recognized over the term of the lease.

On April 3, 2015, the Company and certain of its subsidiaries completed the first closing of the previously-announced agreement with an affiliate of Vertical Bridge Holdings, LLC, for the sale of 411 of the Company’s broadcast communications tower sites and related assets for up to $400 million. In connection with the first closing, the Company sold 367 of its tower sites and related assets in exchange for $369 million of proceeds. Simultaneous with the first closing, the Company entered into lease agreements for the continued use of the towers.

Property, Plant and Equipment
The Company’s property, plant and equipment consisted of the following classes of assets at March 31, 2015 and December 31, 2014, respectively:

(In thousands)	March 31,		December 31,
	2015		2014
Land, buildings and improvements	$	698,642	$	731,925
Structures		2,961,735		2,999,582
Towers, transmitters, and studio equipment		457,517		453,044
Furniture and other equipment		544,002		536,255
Construction in progress		68,030		95,671
		4,729,926		4,816,477
Less: accumulated depreciation		2,144,136		2,117,413
Other property, plant and equipment, net	$	2,585,790	$	2,699,064

Indefinite-lived Intangible Assets

The Company’s indefinite-lived intangible assets consist of Federal Communications Commission (“FCC”) broadcast licenses in its iHM segment and billboard permits in its Americas outdoor advertising segment. Due to significant differences in both business practices and regulations, billboards in the International outdoor advertising segment and in Latin America are subject to long-term, finite contracts unlike the Company’s permits in the United States and Canada. Accordingly, there are no indefinite-lived intangible assets in the International outdoor advertising segment.

Other Intangible Assets

Other intangible assets include definite-lived intangible assets and permanent easements. The Company’s definite-lived intangible assets include primarily transit and street furniture contracts, talent and representation contracts, customer and advertiser relationships, and site-leases, all of which are amortized over the respective lives of the agreements, or over the period of time the assets are expected to contribute directly or indirectly to the Company’s future cash flows. Permanent easements are indefinite-lived intangible assets which include certain rights to use real property not owned by the Company. The Company periodically reviews the appropriateness of the amortization periods related to its definite-lived intangible assets. These assets are recorded at cost.

The following table presents the gross carrying amount and accumulated amortization for each major class of other intangible assets at March 31, 2015 and December 31, 2014, respectively:

(In thousands)		March 31, 2015				December 31, 2014
		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Transit, street furniture and other outdoor contractual rights		$	666,821	$	(445,797)	$	716,723	$	(476,523)
Customer / advertiser relationships			1,222,518		(800,930)		1,222,518		(765,596)
Talent contracts			319,384		(231,083)		319,384		(223,936)
Representation contracts			240,017		(211,229)		238,313		(206,338)
Permanent easements			171,238		-		171,271		-
Other			388,247		(177,705)		388,160		(177,249)
	Total	$	3,008,225	$	(1,866,744)	$	3,056,369	$	(1,849,642)

Total amortization expense related to definite-lived intangible assets was $62.9 million and $66.9 million for the three months ended March 31, 2015 and 2014, respectively.

As acquisitions and dispositions occur in the future, amortization expense may vary. The following table presents the Company’s estimate of amortization expense for each of the five succeeding fiscal years for definite-lived intangible assets:

(In thousands)
2016	$	222,529
2017		199,136
2018		126,019
2019		41,451
2020		35,217

Goodwill

The following table presents the changes in the carrying amount of goodwill in each of the Company’s reportable segments:

(In thousands)		iHM		Americas Outdoor Advertising		International Outdoor Advertising		Other		Consolidated
Balance as of December 31, 2013		$	3,234,807	$	585,227	$	264,907	$	117,246	$	4,202,187
	Acquisitions		17,900		-		-		299		18,199
	Foreign currency		-		(653)		(32,369)		-		(33,022)
	Other		60		-		-		-		60
Balance as of December 31, 2014		$	3,252,767	$	584,574	$	232,538	$	117,545	$	4,187,424
	Acquisitions		-		-		-		-		-
	Foreign currency		-		(167)		(16,625)		-		(16,792)
	Other		-		-		-		-		-
Balance as of March 31, 2015		$	3,252,767	$	584,407	$	215,913	$	117,545	$	4,170,632

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

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